NCS Prospects Conference OGA Strategy & Plans Gunther Newcombe - - PowerPoint PPT Presentation

NCS Prospects Conference

OGA Strategy & Plans

Gunther Newcombe Director Operations

November 2016

OGA became a GOVCO on 1st October 2016

OGA

Progressive regulation

Balanced application of new regulatory framework

Role of the OGA

Investment and action Encouraging collaboration Effective stewardship

OGA Approach

Sanctions Rewards

Sanctions Information & Samples Dispute resolution Meetings MER UK Strategy – binding obligations & safeguards

Striking the right balance

UKCS summary

Production (boepd)

2014 1.4 million 2015 1.6 million 2016 1.65 million

Production efficiency

2014 65% 2015 71% 2015 range 30% to 90+%

Infrastructure

5,000+ wells 250+ subsea systems 3,000+ pipelines 250 fixed installations

Exploration & appraisal

2014 wells 32 2015 wells 26 2016 wells (est) 16 to 19

Costs

Unit costs down by nearly 30%

Source – OGA Source – OGA and Oil & Gas UK

Development

6.3bn boe

in production

• r under

development

Source – OGA Source

Source – OGA and Oil & Gas UK

Resources

Source – OGA

Remaining potential

Produced

43bn

10bn 20bn

Improving & adapting to new conditions

Supply chain

c.£30bn turnover

Source –Oil & Gas UK and EY

80% of UK oil and gas jobs 40% through exports Jobs

330,000 jobs in the UK

Source – Oil & Gas UK

Delivered through or supported by upstream oil and gas activity

Average unit operating costs have fallen from £18 per barrel in 2014 to an estimate of £13 per barrel in 2016

Mature Yet-to-Find

UKCS has up to 9bnboe YTF in mature areas

c

NNS WOS SNS

CNS NNS WOS

SNS

NNS CNS WOS SNS

Source: OGA

Number of Wells

Exploration and appraisal

E&A activity currently at low levels but increasing with encouraging discovered & appraised volumes

Source: OGA

Lack of funding is a global issue for exploration High well costs and JV misalignment OGA work to ensure inventory is drilled

Estimated/OGA forecasts

Frontier exploration

£40m UK government funding to incentivize frontier exploration

2015 & 2016 Programs

80,000 kms new/reprocessed data 2016 seismic data acquisition complete CNS well review & Palaeozoic study issued

Competition to define potential

£1m prize money shared between 2015 & 2016

New world-class visualization facility

£700,000 funding for Lyell Centre in Edinburgh

New world-class visualization facility

£750,000 for 3 post-doctoral appointments in geoscience & reservoir engineering

29th Round applications closed on 26th October currently being evaluated

Offshore licensing rounds

Discoveries

Significant potential can be unlocked with a combination of technology, reduced cost & access

Central estimate of reserves/resources mmboe

Producing fields Ongoing developments Currently locked discoveries 10 100 1000

Source: OGA

350+ unsanctioned discoveries¹, 3.4bn boe* Small pools (<50mm boe) contain 2.4bn boe* Over 150 small pools in unlicensed acreage

¹ Excluding potential developments currently under discussion * P50 technically recoverable resources

Reserves

UKCS production increasing, smaller projects in 2016, successful E&A

2013 2014 2015 2016

72 Mmboe 157 Mmboe 511 Mmboe 514 Mmboe 458 Mmboe 143 Mmboe 150 Mmboe 342 Mmboe 566 Mmboe 582 Mmboe 65 Mmboe 300 Mmboe

Discovered and appraised Sanctioned Produced

Asset stewardship

Asset stewardship framework developed between OGA, Industry & Government

Asset owners consistently do the right things to identify & then exploit opportunities Assets are in the hands of those with the collective will, behaviours & capabilities to achieve this

Strategies & expectations

All strategies issued, delivery programmes in progress, stewardship expectations end 2016

Stewardship expectations

Asset Stewardship Expectations co-authored with Industry

10 Asset Stewardship Expectations

JV Hub Strategy E&A Work Programme Optimum use of Subsurface Data Licence Activity, Decision Points & Milestones Robust Project Delivery Production Optimisation Information Management Technology Plan Collaboration Planning for Decommissioning

Link to supporting obligations of MER UK Strategy and/or Energy Act Set out minimum expectations

• f what good looks like

Expectations have a one page

• verview & short guidance

Issued in 4Q 2016 with implementation during 2017

Key messages

Processes and plans now in place with 2017 being about delivery

Since 1st October OGA is a GOVCO & has new powers & sanction abilities Significant remaining mature & frontier exploration potential and discovered volumes NPD & OGA working together to share best practice to maximize value OGA, Industry & Government worked to develop an asset stewardship framework